IATA: Response to delta variant stymies domestic recovery

Published October 1, 2021, 4:55 PM

by Emmie V. Abadilla

Government response to the COVID-19 Delta variant stymied domestic travel demand in August, slowing recovery, according to the International Air Transport Association (IATA).

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Total demand for air travel in August 2021, measured in revenue passenger kilometers or RPKs, plunged 56.0 percent compared to August 2019.

Because comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons are to August 2019, which followed a normal demand pattern.

This marked a slowdown from July, when demand was 53.0 percent below July 2019 levels.

Demand was entirely driven by domestic markets, which were down 32.2 percent compared to August 2019, a major deterioration from July 2021, when traffic was down 16.1 percent versus two years ago.

The worst impact was in China, while India and Russia were the only large markets to show a month-to-month improvement compared to July 2021.

International passenger demand in August was 68.8 percent below August 2019, which was an improvement compared to the 73.1 percent decline recorded in July.

All regions showed improvement due to growing vaccination rates and less stringent international travel restrictions in some regions.

“August results reflect the impact of concerns over the Delta variant on domestic travel, even as international travel continued on a snail’s pace toward a full recovery that cannot happen until governments restore the freedom to travel,” IATA Director General Willie Walsh summed up.

While the US announced it will lift travel restrictions from early November on fully vaccinated travelers challenges remain, he noted.

“September bookings indicate a deterioration in international recovery. That’s bad news heading into the traditionally slower fourth quarter,” Walsh predicted.

Asia-Pacific airlines saw their August international traffic fall 93.4 percent compared to August 2019, barely improved over the 94.5 percent drop registered in July 2021 versus July 2019 as the region continues to have the strictest border control measures.

Capacity dropped 85.7% and the load factor was down 44.9 percentage points to 37.9%, by far the lowest among regions.

Middle Eastern airlines had a 69.3% demand drop in August compared to August 2019, improved upon the 73.6% decrease in July, versus the same month in 2019.

Capacity declined 55.0%, and load factor deteriorated 26.2 percentage points to 56.2%.

North American carriers experienced a 59.0% traffic drop in August versus the 2019 period, much improved on the 61.7% decline in July compared to July 2019.

Capacity sank 48.5%, and load factor dipped 18.0 percentage points to 70.3%.

Latin American airlines saw a 63.1% drop in August traffic, compared to the same month in 2019, improved over the 68.3% decline in July compared to July 2019.

August capacity fell 57.3% and load factor dropped 11.4 percentage points to 72.6%, which was the highest load factor among the regions for the eleventh consecutive month.

European carriers’ August international traffic declined 55.9% versus August 2019, significantly bettering the 63.2% decrease in July compared to the same month in 2019.

Capacity dropped 45.0% and load factor fell 17.7 percentage points to 71.5%. African airlines’ traffic fell 58.5% in August versus two years’ ago, somewhat improved over the 60.4% decline in July compared to July 2019.

August capacity was down 50.1% and load factor declined 12.7% to 63.0%.

In terms of domestic passenger markets, China’s domestic traffic dropped 57.0% compared to August 2019 – a huge deterioration from the 2.5% fall in July.

However, overall cases were low, and outbreaks were mostly under control by the end of August, suggesting numbers will improve in September.

India’s domestic traffic reversed the trend, as demand fell 44.8% in August, improved from a 58.9% decline in July versus July 2019, owing to positive trends in new cases and vaccination.

“The rapid slowdown in the domestic traffic recovery in August, owing to a spike in the Delta variant shows how exposed air travel continues to be to the cycles of COVID-19,” says Walsh.

“For governments, that should send two messages. The first is that this is not the time to step away from continuing support of the industry, both financial and regulatory.”

“The second is the need to apply a risk-based approach to managing borders–as passengers are already doing in making their travel decisions.”

 
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